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#3 ARR is incorrect. Please answer again
- Calculate the payback period for above
- Calculate the
Step by step
Solved in 2 steps
- a) what is the discounted payback period? b) what is the NPV? c)What is the IRR? note: please you dont use excel.): i-What is limitation of Payback period, Net Present Value (NPV) and Internal rate of return (IRR). ii- What is modified IRR?The payback period method has been criticized for not taking the time value of money intoaccount. Could this limitation be overcome? If so, would this method then be preferable to theNPV method?
- Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3. Using the Laplace criterion, what would be the highest expected payoff? S1 S2 S3 A $100 145 120 B $75 125 110 C $95 85 60Compute for the Modified Payback Period of opportunity #1. Compute for the Modified Payback Period of opportunity #2. Based on your computed modified payback periods, which opportunity is more favorable?How do you solve the Annual Worth (AW) of A & B manually? without using excel
- 1. If you perform a NPV analysis on a perspective investment using a "d" = 15% and: a. the NPV Is < 0, what can you tell me about the investment's IRR (time adjusted rate of return)? b. the NPV is > 0, what can you tell me about the investment's IRR (time adjusted rate of return)? c. the NPV is= 0, what can you tell me about the investment's IRR (time adjusted rate of return)? 2. We presume in Investment analysis that the payback method of evaluation is a better measure of.................than it is a measure of...................... We also think less of the payback method because it sometimes ignores the............., ..................of an investment since the................. the oftentimes occurs after the payback period has lapsed. 3. Please explain why we oftentimes equate EBITDA (earnings before subtracting] interest, taxes, depreciation & amortization) with NOI (net operating income) in examining business' profitability. Why don't…Which of the following is not an advantage of the average rate of return method? a.includes the amount of income earned over the entire life of the proposal b.takes into consideration the time value of money c.emphasizes accounting income d.easy to usec) explain the disadvantages of each criteria; payback period, discounted payback, NPV, IRR
- Calculate the payback period, NPV and IRRA) What is the IRR for Project A and B? B) if required return is 8%, what is the NPV of project A and project B? C) at what discount rate would the company be indifferent between these 2 project?can you explain why t-bill 7 % was used for calculating the CAPM return? I think it has something to do with % return on t-bill not sure